Amazon (AMZN) Finalizes USPS Agreement, Maintains 80% of Package Volume

Key Takeaways

• Amazon and USPS finalized a package delivery agreement preserving approximately 80% of current shipment volumes
• USPS avoids the previously threatened two-thirds reduction in Amazon deliveries
• Under the renewed terms, USPS will handle roughly 1 billion Amazon packages each year
• FedEx (FDX) shares declined 0.8% to $358.91 while UPS dropped 1% to $97.16 after the announcement
• UPS plans to slash its Amazon delivery commitments by more than 50% before the end of 2026

---

The U.S. Postal Service and Amazon have reached a new delivery partnership agreement, averting what many feared would be a catastrophic financial setback for the financially struggling postal agency.

Under the renewed contract, USPS will continue handling approximately 1 billion Amazon packages annually — representing roughly 80% of the volume it currently manages. This marks a significant improvement from earlier reports suggesting Amazon might slash deliveries by two-thirds.

Amazon represents USPS’s largest commercial client, contributing approximately $6 billion to the agency’s roughly $80 billion yearly operating budget. A substantial loss of this revenue stream would have created severe financial challenges. The Postal Service cautioned in recent weeks that it could face a cash shortage as soon as October.

Amazon.com, Inc., AMZN

The arrangement still requires official regulatory authorization.

Impact on Competing Delivery Services

The announcement triggered negative reactions among Amazon’s competitors. FedEx (FDX) stock retreated 0.8% to close at $358.91, while UPS shares fell 1% to end at $97.16.

UPS has already initiated steps to reduce its Amazon delivery exposure. In January 2025, the company revealed plans with Amazon to decrease delivery volumes by over 50% by late 2026. This represents a calculated strategic pivot away from Amazon reliance.

Conversely, FedEx adopted the opposite approach — establishing a multi-year delivery partnership with Amazon in May 2025.

Amazon’s Proprietary Logistics Network Expansion

Amazon shows no signs of slowing its own delivery infrastructure development. The e-commerce giant announced in April 2025 that it would commit over $4 billion toward expanding rural delivery capabilities throughout the United States by late 2026.

This buildout will proceed as planned — though not at a magnitude that would directly compete with USPS’s comprehensive door-to-door coverage, according to informed sources.

Meanwhile, USPS continues searching for additional revenue streams to stabilize its financial position. The agency has requested authorization for a temporary 8% rate increase on priority mail and package services, scheduled to take effect April 26. Postmaster General David Steiner has additionally proposed increasing first-class stamp prices from the current 78 cents to 95 cents.

USPS has accumulated $118 billion in net losses since 2007, primarily due to the dramatic decline in first-class mail volumes, which have dropped to levels not seen since the late 1960s.

Steiner previously indicated to Reuters that USPS currently delivers approximately 1.7 billion packages for Amazon each year, making the 1 billion package threshold in the new agreement a notable decrease — though considerably better than Amazon’s earlier proposals.

The post Amazon (AMZN) Finalizes USPS Agreement, Maintains 80% of Package Volume appeared first on Blockonomi.